Thanks for taking the time to comment Joe.

Having functionality broken into modules could also:

1. Allow a module, say CiviReport, to improve at it's own pace instead of the pace of a CiviCRM release.
2. Possibly making it easier for the community to contribute code/documentation by being exposed to a subset of issues rather than CiviCRM as a whole (i.e. Bug bingo for CiviMail would be easier to tackle for the casual contributor than bug bingo for CiviCRM (and all components).
3. Should allow for better testing... easier to segment the tests and interfacing with core and the modules with mock objects.
4. We could all finally see the dream of the CiviUnicornsAndRainbows module. :)

Maybe the "componentizing extensions" discussion should be a new blog post to see if there's any traction.